Juniper Networks has dumped its biggest manufacturer Plexus from a huge contract to make switches and network gear.

Juniper had said that it was cutting the number of suppliers it uses and Plexus announced yesterday that it was one of the firms getting the axe.

"This is very surprising news to us given our recent communications and activities with Juniper, including the recent award of Juniper programmes and our collaboration with Juniper on activities to support their competitiveness," chief exec Dean Foate said in a canned statement. "Plexus has been an important strategic supplier to Juniper for more than a decade."

Plexus said that it was expecting to finish its breakup with Juniper by the end of next year. For the fiscal year ending in October 2011, work with Juniper accounted for around 17 per cent of entire sales for Plexus, but Foate said the company would get over the loss.

"While this is a significant event for us in the near term, our new business wins of $956m during fiscal 2012, including in the networking/communications sector, provides us continued optimism in our strategy," he said.

Despite the firm's confidence, investors are clearly unsure how Plexus will handle the lost contract, sending shares down 23 per cent yesterday and in after-hours trading. ®